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Administration Nears Decision on Ethanol Policy

Source: Farm Policy | Nov 12, 2013

The U.S. government may be about to reduce the federal requirement for blending ethanol into fuel, which has major ramifications for farm states, food prices and energy, according to a report yesterday in Politico.

As early as Tuesday, the Environmental Protection Agency (EPA) is expected to announce how many billions of gallons of ethanol it will require refiners to blend into gasoline and diesel fuel in 2014. If it sticks with a draft version that leaked in October, the agency will lower the amount to 2012 levels.

The debate over how much ethanol should be forced into the American gasoline supply pits powerhouse special interests against each other. On the pro-ethanol side: the renewable fuels industry, corn growers and many Midwestern lawmakers. On the anti-ethanol side: the oil industry, restaurant owners, livestock and poultry producers and, increasingly, a disenchanted environmental movement that no longer believes the plant-based fuel is a greener alternative to fossil fuels. In addition, a new generation of tea party Republicans — viscerally opposed to government mandates and fuel subsidies — has joined the fight against ethanol.

The EPA’s decision, just three months after the agency hiked the long-overdue 2013 ethanol mandate despite the oil industry’s pleas, could mark a shift in momentum in the biofuels wars. Congressional leaders are talking about rewriting the law that created the mandate, while oil lobbyists continue to fight to repeal it entirely.